The Economic Development of an Area - Assignment Example

ECONOMIES OF CITIES AND REGIONS REVISITED Question 1 Uneven development refers to the lack of uniformity in the development, economic growth or wealth in areas that may be found within a city, or between urban and rural areas or between regions. In other words, this term asks the question as to why a region or area is wealthier than other areas. The mechanisms that may result in uneven development are sometimes attributed to the natural state of affairs or to the type of society that cause the development of an area. In the first mechanism, uneven development is blamed on nature, that is, that nature has not been fair in endowing places and regions with more or less equal resources. Thus, some countries have extensive deposits of rare minerals whilst others are completely barren. There are objections to this line of reasoning, however – one that can be illustrated by concrete examples. For example, Japan and Singapore have no extensive mineral deposits, yet they are two of the richest and most progressive states in the world. On the other hand, if uneven development is attributed to the society living and developing the area, this does not explain why some societies continue to use the same technology and did not advance although they had exposure to other societies from which they could have enhanced their technology and knowledge Coe et al (2007). Coe et al (2007) theorised that uneven development is a natural byproduct of the mechanisms of capitalism. Capitalism follows an ‘ebb and flow of investment’ as a natural course as it seeks new markets or even old markets to redevelop. As the need to seek new markets emerge, a new landscape emerges where the old market becomes unprofitable and fades away, whilst the new market becomes the profitable ones. Question 2 The world is said to be figuratively shrinking because distance, time and space no longer poses great obstacles to movement and communication. In other words, getting from point A to B, regardless of the distance between them, is not a big deal anymore as it used to be. Thus, today one can be sitting on a beach in Australia, but tomorrow that person can be walking the streets of New York. The shrinking world is made possible by advances made in travel, technology and the internet. New road networks, faster aircrafts and the internet are just some of the new advances in the modern world that is figuratively shrinking the world. The shrinking process, according to Leyshon (1995) involves several elements: the overcoming of the friction of distance, overcoming isolation as more places are brought in contact with one another, and the acceleration of life pace. Although this phenomenon has been happening for a long time now, it began picking up speed since the last 150 years, particularly after the revolution of transport and communications in the 19th century. The time-space compression phenomenon has resulted in the so-called ‘human extensibility’ where physical presence is no longer a must to conduct transactions. Thus, items can be bought and sold over the internet without the buyer and seller physically meeting, and jobs can be completed without actually being physically present in the workplace as conferences can be conducted over the internet or paper works can be sent by email or fax. Nonetheless, geography has not become less relevant because of time-space compression because this phenomenon is, in the first place, relative to the wealth and economic resources of regions. In some regions, such as the first world countries, the impact of the phenomenon is heavily felt, but in countries that are economically struggling, the phenomenon is hardly felt (Leyshon 1995). Question 3 Since the 1980s, manufacturing in Australia served the chief purpose of creating secure employment. This coincided with federation and the decision of the Australian government to adopt trade liberalization as well as currency appreciation measures as a response to gobalisation and resource boom. The effect of this measure has triggered a slow decline of the manufacturing sector due to the devaluation of Australian labour. This created a domino effect that started with de-industrialisation or the shift away from manufacturing. De-industrialisation is also triggered by advances or changes in technology, restructuring of labour processes, declining demand for goods, and the relocation of manufacturing sites for cost cutting. De-industrialisation resulted in job losses and increasing unemployment rate. It has also contributed to the so-called two-speed economy and uneven development (Weller and O’Neill 2014). In Sydney, the same impact of de-industrialisation was felt considering that it used to constitute more than 30% of the country’s manufacturing production. A restructuring of the city ensued, and although the city’s industrial area have been maintained, those outside the area have been declining. To substitute for the continued deindustrialisation, there was a shift to property development, warehousing, trucking, and offices in the affected areas of the city. The industrial; restricting of Sydney resulted in net manufacturing growth despite the recession in the 1980s (Fagan 2000). In addition, the growth of the information services in Sydney was able to save it from the effects of deindustrialisation. These services became relevant in finance and insurance, property and business, administration and educational services (Fagan 2000). De-industrialisation, particularly in large first world cities, is also linked to the new international division of labour or NIDL, which accompanied the advent of globalisation. NIDL entails the relocation of manufacturing to developing countries where labour costs are comparatively cheap. Thus, big companies like Apple, bring their manufacturing to China or some other Asian country (Munck 2002). Question 4 Neoliberalism is the term given to a set of economic policies that is characterised by a shifting of economic determinism from the public to the private. It is strongly associated to the laissez-faire doctrine of Adam Smith, except that the government still plays a role in guiding economic measures although in a general attitude of hands-off. The influence of neoliberalism can be found in new governance structures and strategies where local leadership, creativity and innovation are being highlighted and associated with the economic landscape as government recedes into the background. A manifestation of the neoliberalism approach in urban centres is a growing population of creative people, such as high technology workers and gay people (Beer 2012). In keeping with the principles of neoliberalism, the regional approach in Australia has likewise shifted from a highly centralised approach to one of extensive consultation with local leaders and authorities. The pursuit of this approach necessitated the use of case studies or studies that take into account local conditions and circumstances. Research is, thus, focused on the local level and an extensive look into ‘locality-specific potentials’ (Beer 2012). Examples of spatial inequalities brought about by neoliberalism are uneven urban development, where some areas are developed and some have been left to deteriorate. Since neoliberalism is underpinned by the laissez-faire approach where market forces are left to control the economic direction of a region, government intervention is kept to a minimum or none at all. This has resulted in areas that are declining socially and economically because of their inability to keep up with the times because of certain conditions brought about by deindustrialisation, among others. Question 5 Some of the characteristics of a global city are: serving as command centres for the global economy through the heavy presence of financial institutions, such as banks; provides a point for the free flow of information; open to the free flow of commodities, ideas, information, money and information; usual destination for highly skilled migrants and skilled information workers from Latin America and the Asia-Pacific regions, and; heavily associated to a culture identified with the cyberspace (Fagan 2000). Global circuits, according to Sassen (2009), are the key features of a global economy that criss-cross the world connecting one city to each other serving as intercity infrastructure in the globalised world. These circuits are varied, but connect cities that are similarly situated economically. As an example, Sassen cited Mumbai, London and Bogota as constituting a real-estate development global circuit and Brazil, Kenya, Indonesia and New York as a coffee global circuit. A city becomes part of a global circuit depending on whether it is producing, trading or financing. Cities specialised by developing its capabilities that are available to it. In this manner, the uniqueness and depth of such capabilities will be of value to global firms in accordance to their particular needs for a given time and situation (Sassen 2009. pp. 5-9). Citing the Loughborough group, Hall (2001) enumerated the three measures of a city’s global-ness: content analysis of leading newspapers; determining personnel migration, and; detailed analysis of producer services (p. 63). Sydney is a global city because it manifests most of the indicia of a global city as enumerated by Sassen. It has extensive presence of financial institutions, commodities and information freely flow, it is a destination for many highly skilled immigrants, among others. Question 6 The two-speed economy refers to a contrasting economic growth in the same region. The Australian two-speed economy, thus, is used in the context of the economic boom being experience by regions where mining is bringing in economic resources, such as Western Australia contrasted to the languishing and weaker economic growth currently being experienced in non-mining states, such as Victoria, NSW, Tasmania and South Australia. Some of the drivers of economic growth are adaptation and capacity for transition. Thus, a city that used to rely on manufacturing can still survive and grow if it is able to adapt to changes and has the ability for restructuring. Another driver of growth is economic diversification or the state of engaging in a multiple and unrelated economic activities so that when an industry declines, the region has other industries to depend on for economic growth (Hogan and Young 2014). The impact of neoliberalism depends on the capacities and resources of regions. In regions that have capacities, the approach can spur creativity and productivity, but in comparatively poorer regions, the total absence of government intervention is counter-productive. Government should, thus, have regional policies that must take into account the unique resources and conditions of the region. The rise of call centres have been precipitated by advances in communication technology and information services. The decision to locate these centres to remote regions is due to the comparatively low cost of operating them in those regions and the availability of manpower that have the skills and the willingness to do the job (Schatz 2007).. Question 7 Shrinking cities, according to Hollander (2010), are cities, experiencing notable population decline. About 20 cities in the US have been determined to be shrinking cities. In addition, shrinking mostly occurs in former heavily industrialised cities, such as those in England, Germany, North America, Italy, France and the Netherlands. Cities shrink for a number of reasons. One reason is deindustrialisation or the process whereby formerly industrialised cities experience decline due to economic crises, destruction in times of wars, and out-migration of the middle class (Rieniets 2010). Te effects of population decline are varied, according to Hollander. In some it can mean abandoned building that contributed to urban decline and in some, it can actually increase the quality of life as there are less noise pollution, less crime and less distractions (2010). Question 8 Yes, regional policy has a place in the scheme of things. This has been proven by the Australian experience in the 1980s and the 1990s where a tough neoliberalist approach in regions resulted in failure and political consequences. It has been determined by research that the government needs to put in place a limited interventionist policy in regions because a rigid neoliberal approach tended to worsen spatial inequality and disadvantage certain portions of the population within a region (Tonts 2005). In addition, Tomaney (2012) cited the place-based approach policy being successfully used in Europe as a regional policy. This approach focuses on the strength of the region and centers its development on those strengths. Moreover, Storey (2001) noted that a regional policy that uses micro-policy instruments is important in regional development. According to Tonts (2000), rural areas in Australia were negatively impacted by economic changes in the last 20 years. These impacts included rising unemployment, depopulation, contraction of economic activities, and worse, the breakdown of social institutions and networks. All these changes were prompted by decreasing farm incomes, contraction of economic activities and agricultural reforms that departed from socio-spatial considerations to economic efficiency – in other words, economic restructuring that tended towards the neoliberalism approach. As a result, there has been a notable decline in small country towns that had been dependent on agriculture to sustain their economy. This decline has affected about 40% of Australia’s rural areas, according to Tonts (2000), with 90% of them having a population of less than 5000. However, rural communities near the coast and near metropolitan areas are showing a contrasting trajectory of rising population (Tonts 2000). In contrast, population growth is being experienced selectively in particular areas of the country. These areas or regions include metropolitan computer beds or to coastal and scenic areas, such as the coastal areas of Victoria, Queensland and NSW, which contrasted with the decreasing population in inward regions. In addition, population growth is also being experienced by capital cities. In Western Australia, for example, population growth can be observed near the coastal areas, particularly in Perth, but a notable decreasing population is simultaneously occurring in its inland regions. Question 9 Multifunctional countryside refers to the transition of rural areas from a primarily agricultural or primary production to a more expansive range of activities. This phenomenon is spurred by changing social values, emergence of alternative rural land uses, and agricultural overcapacity (Jones and Shaw 2012). In addition, agriculture in Australia is changing resulting in economic and social upheavals. Agriculture is being changed as a result of declining prices in agricultural products, farm mergers and expansions, the use of automation and machines, and the migration of the population from agricultural lands to urban areas. Festivals are real economic activities because they contribute to the revitalisation and development of localtities. They promote tourism, among others, and have a positive impact on communities. According to Murray and Dunn (1996), the organisation of cultural events is as vital as economic revitalisation strategies because they raise the quality of life in the communities and gives a sense of achievement and involvement to the people (cited in Tonts 2000). In that sense, festivals, along with other measures, can help a town’s decline because social developments as companions to development minimises divisiveness and enhances community well-being (Tonts 2000). 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